02/11/2016, Jakarta - Japan-based real estate giant Mitsubishi Estate has signed an agreement to support the Daswin Project, an office building development project worth US$260 million in Central Jakarta. The company will collaborate with manufacturing company and property developer Gesit Group and diversified conglomerate Santini Group to develop the project, which is slated for completion in 2020.

“The project is the first business opportunity for Mitsubishi Estate to develop an office building in Indonesia and Mitsubishi Estate fully intends to utilize the know-how of the Mitsubishi Group as a whole,” Mitsubishi said in a statement on Tuesday. Mitsubishi Jisho Sekkei will be in charge of the architectural design, while Mitsubishi Jisho Property Management will advise the property’s management. Both companies are subsidiaries of Mitsubishi Estate.

The Daswin Project will be located on a 16,000 square meter (sqm) plot of land and will consist of a 46-storey grade A office building with retail and multifunction facilities on the lower floors, adding up to a total floor area of over 130,000 sqm. To date, the company has run businesses in diverse fields related to real estate in Japan, including an office-building business centered around the Marunouchi district in central Tokyo, a retail property business, a residential business and a hotel business.

The company’s area of operations also includes the US, the UK and extends to Asian countries such as China, Singapore and Indonesia. “Indonesia is proactively promoting economic growth among ASEAN nations. The economy is expanding at an annual rate of about 5 percent and further growth is expected going forward,” the company stated.

“Through this project, Mitsubishi Estate hopes to contribute to the country’s economy by combining the real estate development knowhow that it has accumulated around the world.” Meanwhile, according to the latest report by real estate services firm Cushman and Wakefield, office building occupancy rates in Jakarta’s central business district (CBD) are projected to decline further following the expansion of new supply over the next few quarters. Rental rates are also projected to remain under pressure.

In the third quarter, inquiries and leasing transaction activities remained active and several large leasing transactions were recorded, such as the 8,500 sqm office space at the Centennial Tower in Gatot Subroto and about 5,500 sqm at the AIA Central in Sudirman for company relocations.

The report also says that the rental rate in rupiah decreased further in the third quarter of 2016. By the end of September, the average CBD office gross rental stood at Rp 318,150 ($24.4) per sqm per month, decreasing by 1.3 percent quarter-on-quarter (qoq). In US dollar terms, it stood at $24.31 per sqm per month, a slight increase of 0.9 percent qoq, mostly due to currency exchange rate factors.